Rice bran oil producers hail Govt move on bulk exports

Rice bran oil (RBO) producers believe the Cabinet decision to allow bulk exports and remove the quantitative restriction of 10,000 tonnes a year is a win-win situation both for the industry and India’s paddy farmers.

While consumption of the premium edible oil is limited within the country, overseas demand has remained steady and can help the industry achieve its output potential. India accounts for two-third of global RBO production but industry officials believe domestic production can be higher.

“It is a win-win situation for both rice farmers and manufacturers. We have been asking the government to lift these restrictions and allow bulk sales since 2008. Farmers can expect better prices for their produce with exporters being able to service foreign demand,” said BV Mehta, Executive Director, Solvent Extractors’ Association of India.

The country produces between 900,000 tonnes and one million tonne (mt) of RBO each year out of total global output of around 1.5 mt. Mehta believes that Indian manufacturers can produce 1.5-1.6 mt of RBO a year, which currently sells for about $1,000/tonne.

“We are already far ahead of other producing countries and this move will help the industry achieve its potential. One can expect the move from consumer packs to bulk sales to benefit all involved in the trade,” he said.

RBO is produced after paddy is de-husked and the polishing process separates the rice bran, which is the oily layer between the paddy husk and the white rice. Crude RBO is then extracted from the bran and packaged after refining.

AR Sharma, Chairman-cum-Managing Director, Ricela Health Foods, which exports about 80 tonnes of RBO every month, concurred with Mehta’s assessment and expected more bulk buyers to build brands using Indian exports.

“We have already started receiving enquiries from abroad. The 10,000 tonne cap would earlier be reached in just six months and bulk buyers shied away from building a brand. This should change now,” he said, adding that the Japanese market was significant, given its status as a net importer.

Other countries that the exporters are eyeing include Thailand, China, Australia, New Zealand and the US. Long touted as a healthy alternative to traditional cooking oils such as cottonseed or sunflower oils, domestic demand remains suppressed due to its higher price.

“It is priced about ₹10-20/kg higher depending on the brand. But with higher output and more awareness, there could be a shift,” said Sharma.